Ravensthorpe, Western Australia
Australia
(155 km west of Esperance)

October 7, 2011 - First Quantum Minerals Ltd said nickel production is set to resume by the end of 2011 from Australia's Ravensthorpe mine following a two-year redevelopment program.  Annual average production for the first five years is expected to be 39,000 tonnes, it said on Friday.  At that rate, First Quantum would become Australia's no. 2 producer behind BHP Billiton , which operates mines, a refinery and a smelter in Western Australia state.  Currently, Minara Resources is Australia's second largest nickel producer, targeting production of between 29,000 and 32,000 tonnes in 2011.  "The project is progressing to plan and we plan on producing by the end of the year," First Quantum said in a statement emailed to Reuters.  First Quantum bought the operation from BHP Billiton in February last year for $340 million, a fraction of the $2.2 billion BHP Billiton spent on its initial development.  BHP shut down Ravensthorpe in 2009 after nickel prices dropped to less than half the current price of around $19,170 a tonne ($8.93 per pound) as the global financial crisis crippled commodities demand.  Ravensthorpe was designed by BHP to supply around 55,000 tonnes of nickel annually, or around 3 percent of world capacity, but never came near that rate before closing.

February 10, 2010 - First Quantum Minerals Ltd. announced the finalization of the acquisition of the Ravensthorpe Nickel Operation in Western Australia following the receipt of the relevant Government approvals. The acquisition will take effect on February 10, 2010.  The Company is planning to spend the next 12 months constructing two crushing plants in the modification of the crushing, conveying, stockpile and reclaim areas of the plant. This is expected to be followed by approximately six months of commissioning and ramp-up. The capital requirement for the modification is estimated at approximately US$150 million, depending on currency exchange rates.

December 9, 2009 - Quantum Minerals will spend about $120-million in capital expenditure (capex) to bring the Ravensthorpe nickel operation in Western Australia back into production and to ramp up the operation’s production.  Chairperson and CEO Philip Pascall said in a conference call that the company had made provision to spend about $140-million on the project, thus allowing it to have $20-million of contingency funding available for the project.  BHP Billiton, which had shut down the Ravensthorpe mine in early January owing to low nickel prices, which it said made the operation unprofitable, on Tuesday announced that it would sell the operation to First Quantum for $340-million.  Ravensthorpe is an open pit mine and hydrometallurgical process plant used to recover nickel and cobalt to produce a mixed nickel cobalt hydroxide intermediate product.
Pascall said that the acquisition reflected First Quantum’s clear strategy of diversifying its commodity profile and its geographical footprint.  It was currently mainly a producer of copper cathode, copper in concentrate, gold and sulphuric acid in a number of African countries.  Pascall noted that when the Australian operation first became available for sale, the company had been wary of the project, given its hasty closure.  However, the mining firm had found that the main plant was in “an excellent condition”, he stated, adding that it had been one of the “best mothballed plants” the company had ever seen.
There were, however, some technical challenges, mainly related to the front end of the plant, which along with the financial challenges faced by BHP, had led to the closure of the operation.  Nevertheless, Pascall was confident that First Quantum had the capability to overcome these technical challenges, saying that some of its other projects in Africa were a lot more complex to develop.  It would make a number of changes to the front end of the plant and some smaller changes in some other areas of the operation.
He also noted that, owing to its size, relative to that of BHP, it did not face all the constraints that the management of the operation previously had.  Pascall said that, for example, the previous management had come up with a number of ideas on how to improve the plant’s performance, but getting the required authority to implement such changes had lengthened the timelines of the project.  Further, Pascall expected to be able to reduce the costs of production by introducing the changes to the plant, which would allow the mine to become more profitable.  He said that First Quantum had put a lot of effort into understanding the nickel market before deciding to buy the Australian operation.
First Quantum would fund the required capex from internal funds, with Pascall pointing out that the company currently had a robust cash flow. It would, however, review the matter again in the next six to 12 months.  The agreement between the two parties was subject to relevant approvals from the Australian Foreign Investment Review Board and the West Australian Minister for Mines and Petroleum and, subject to these approvals, was expected to close in the first quarter of 2010.  Pascall said that the operation would ramp up to full production in less than 18 months after concluding the acquisition.   First Quantum expected the asset to produce an average of 39 000 t/y for the first five years after operations restart. Overall, production over the expected 32-year mine life is forecast at 28 000 t/y.  The company was currently negotiating with a number of offtakers for the Ravensthorpe output, said Pascall, noting that most of the interest came from China.

January 29, 2009 - BHP Billiton confirmed today it would be repurchasing houses from employees who were original recipients of financial assistance from the company to build or buy a house in the communities of Hopetoun, Ravensthorpe and Esperance.  Since the announcement of the indefinite suspension of the Ravensthorpe Nickel Operation on 21 January, BHP Billiton has undertaken one-on-one discussions with a number of local businesses to understand the impact of the announcement on them. Starting today, BHP Billiton will be moving to the next phase of offering assistance to these businesses.  We will continue to liaise with employees, Government, local businesses and Chambers of Commerce and Industry as we continue to progress.

January 21, 2009 - BHP Billiton announced that it will immediately commence the safe ramp down and indefinite suspension of the Ravensthorpe Nickel Operation (Australia).  As a consequence, Yabulu (Australia) will cease processing mixed nickel cobalt hydroxide product from Ravensthorpe and will revert to processing ore only. The Group plans to complete a future options study for Yabulu during the first half of calendar year 2009.  The decisions announced today are largely the result of the diminished prospects for profitability of Ravensthorpe and Yabulu in the current environment, significant and continuing deterioration in the outlook for the nickel market, and the projected level of capital expenditure required in order to achieve and sustain projected production volumes at Ravensthorpe. As a result, the total workforce at these operations and associated Perth-based functional areas will be reduced by approximately 800 employees and 1,000 contractors by June 2009.